A small little topic, I said. Eight, maybe nine more posts, I said. Maybe one or two will go long, I said. But jeez—six parts???? On negotiation? What was I thinking?

It might need its own tiny book.

But for the moment, this is the last section on negotiation. I hope. Unless someone points out that in a novella’s worth of words, I’ve missed something.

Last week, in Negotiation Part Five, I talked about whether or not you should hire a negotiator. Part Five lists the things you should consider about a negotiator before you bring one to the table—even if you have one to bring. Remember, just because you can hire someone doesn’t mean you should.

If you haven’t read parts one through five on negotiation, read them now. Here’s the link. And study the sections on employees before you read last week’s section and this week’s section. You can find employees part one here, and employees part two here.

As I was getting ready to write this section—early again because I’m about to immerse myself in a project, I found all kinds of horrible stuff about the people you can hire to do tasks for you. The universe seemed to serve up these stories. Some will factor in later in this section.

But let me share one right now. In today’s Washington Post (January 5, 2010), toward the end of an article about the IRS regulating tax preparers (“IRS to Regulate Paid Preparers of Tax Returns to Reduce Errors,” by David S. Hilzenrath), I found these interesting statistics: In 2006, employees of the Government Accountability Office, posing as taxpayers, had tax prep chains fill out tax returns. “All 19 preparers made mistakes, the IRS reported. Only two of the 19 arrived at the correct bottom line.”

Ten of the 19 didn’t report income they’d been told about and “several” didn’t ask about income other than wages—in other words, stuff you as a freelancer would earn.

A 2008 study got similar if slightly better results. Seventeen out of 28 preparers got the bottom line wrong, leaving eleven instead of two getting the results right.

The IRS estimates that somewhere around 1 million people prepare taxes for a fee, and many do that without being tested. As IRS Commissioner Douglas Shulman said, “In most states you need a license to cut someone’s hair, [but today] most tax-return preparers don’t have to meet any standards when they sit down and prepare a federal tax return….” (Emphasis mine)

What is it with this country and its regulations? As I mentioned earlier in the Freelancer’s Guide, my ex-husband got a job as a financial adviser without finishing college, by taking a two-week course, and with our own finances in such a mess that I wasn’t taking advice from him. Book agents across the country have absolutely no regulation, and yet writer after writer puts their entire livelihood in an agent’s hands, often without oversight.

And now this about tax preparers. Since I only had someone prepare my taxes once—and that was because I was broke and in those days only tax preparers could e-file and I needed the damn refund yesterday—I never investigated this in-depth. (And essentially Dean and I handed the tax preparer the finished tax return. She just e-filed it for us.)

Apparently, in the United States of America, you have to follow rules for everything unless you want to handle other people’s money. Oh, I can’t tell you how deeply that appalls me.

And yet time and time again, people tell me how happy they are to hire someone so that they don’t have to think about business. And I think, you need to get out of business now and go work a day job. Because you’re setting yourself up to get screwed.

So…after reading the Guide, you’re smart enough to track your own finances and to bring in a negotiator only when you need one.

Let’s go back to Randy Tatano’s comment, which he made after the first Negotiation section and which I quoted at length last week. Here’s the relevant section for this week:

…a news anchor I know hired an agent to negotiate her next contract. Her agent took such a hard line that management called her bluff and she ended up out of work. She had absolutely no desire to leave but apparently didn’t convey that well enough to her agent.

There’s a lot in that tiny paragraph. I’m not going to make any assumptions about the anchor here because I don’t know her. But here’s what I get from that comment:

The anchor wanted something in her next contract. Maybe she wanted more money, maybe she wanted a better on-air time. Maybe she wanted a half-hour monthly program showcasing her talent. Who knows?

But whatever it was, she told the agent—the negotiator—about it. What she did not say was that this particular thing that she wanted—for the sake of argument, let’s say it’s more money—was flexible. In other words, it was not a dealbreaker.

Clearly, though, the agent did not know that. He thought the goal of the negotiation was to get that extra money—not to keep the anchor’s job. So when management didn’t cough up the extra cash (or whatever it was), the agent walked. (See the section on negotiation options)

Only the client didn’t want to walk. She wanted to keep the job.

What we have here, folks, is a failure to communicate.

And another problem.

The agent acted without consulting the client. He walked without telling her and she lost that job.

Did the agent do a bad job? You could say so, since the anchor didn’t get whatever it was that she wanted. But I’ll wager that the agent did a fine job. The problem here, as I see it, is with the client.

Because she did not communicate her needs up front to the person negotiating for her.

I’ve had agents go off half-cocked on me, especially when I was younger. (And I even had an agent who called me “hon,” which should’ve been a red flag that he didn’t respect me, but I was too young to realize it. Besides, back then, every man who was more than ten years older than me called me “hon” or “dear.” I had no idea that an employee shouldn’t do that.) I had one who set my bottom line at $15,000 per project. That agent rejected projects without telling me. And when I found that out, that agent no longer worked for me.

Now my poor current agent suffers from my past mistakes and those of the people I hired. I must seem a bit paranoid to him. I keep track of everything from rejections to offers. And I keep the most track during negotiations.

How do I do that?

Simple. I have a hard and fast set of rules. And they aren’t for the negotiator. They’re for me.

Before anyone enters into a negotiation for me, I go through these steps.

1. I figure out what I want out of the negotiation. If I were that news anchor, I’d figure out which I wanted more—the money (or whatever it was) or the job. In her case, it was clearly the job. So that’s the primary goal of the negotiation. Make sure I keep that job, no matter what.

2. I figure out how far I’m willing to bend. No matter how much I want the job, am I willing to sell myself short to get it (or keep it)? Do I have other prospects that are as good or better? Do I really want to work with these people? How much leeway do I have in this negotiation? Can I walk?

3. Are there any dealbreakers? For me, there are always dealbreakers. There are clauses in publishing contracts that I will not sign, even if I’m on my last dime and starving to death. As I mentioned in earlier sections, most of those clauses have to do with control, not with money. If my name (or one of my names) goes on the work, then I’d better approve of that work. And that’s my bottom line.

4. What kind of tone do I want to set? Randy alludes to this in another part of his comments. He says, On the other side I was trying to hire an anchor once and the agent was so incredibly obnoxious I moved on to someone else. I prefer a civil tone in my negotiations, but I’ve been known to hire sharks on occasion—folks who are just vicious in negotiation. (I even got rid of one shark for not having enough bite.) Sometimes that hard line is very important to me. Sometimes the tone has to be very, very soft. Again, it varies according to circumstance, which is often why I handle some negotiations on my own. The tone is too difficult to explain easily, so I just do it myself.

Once I’ve figured out what I want, I must communicate all of that to my negotiator. I used to do that on the phone or in person, but soon learned that in business as in life, people hear what they want to hear. So now I write this all into a letter or into an e-mail, so that the negotiator can refer to it during the negotiations.

Then before anything goes any farther, I make sure that my negotiator understands my needs and agrees with them. This sounds so silly, since the negotiator is an employee (a worker, to use that term from Employees Part Two), but often the negotiator, hired for his skill, forgets that.

The agent I had who set the $15,000 limit forgot who was in charge. That agent believed I needed to write slower, and in order to “force” me to write slower (since I clearly wasn’t doing it on my own), the agent set that arbitrary 15K limit on my work, thinking if I got paid that as a minimum, I’d slow down. Now, honestly, how many of you can live on 15K per year? I certainly can’t. In all fairness, I had told the agent on one project that I would take no less than 15K, and that agent heard me set that as a limit for all of my projects. But I know that agent had been trying to get me to slow down for some time, and this was a case of hearing what you wanted to hear.

See why I write things down?

I’ve had negotiators tell me that they’ll never take on a negotiation that they can’t walk away from. Which tells me these are people I don’t want to hire. Because I don’t always want to walk from a negotiation, just like that anchor didn’t above. Which means that this type of negotiator is wrong for me.

Once I’m convinced the negotiator and I are on the same page, then I let the negotiator do his job. But I keep a watchful eye on the proceedings. And here’s the real key:

The negotiator must check with me before making any decision.

I never give the negotiator the ability to make choices for me. That means that the negotiator must present me with any offer that crosses his desk, even if he does not approve of that offer.

I’ve had negotiators tell me that “we got this offer, and I don’t think we should take it.” In that case, I have the negotiator tell me what the offer is and why he thinks I shouldn’t agree to it. I always listen, but I don’t always act on the advice.

Because it is my business and I know what I want from that business, much better than the negotiator ever will.

Sometimes, of course, I should have listened. But more often than not, I ended up making the right choice—because I had possession of all the facts.

I keep track of the negotiation.

I stay in the loop. Even thought I’ve given my negotiator the outlines of what I want, I know that negotiation is not a linear process. First, I need to know that the general terms are agreed to by both sides. But a negotiation can go awry on the smallest of details, some that don’t appear until late in the contract phase.

So I keep track.

When my negotiator thinks we have a deal, I get all aspects of that deal from him, and then I examine that deal with a fine-tooth comb. As I mentioned last week, I often find things that were missed.

In some cases, I find things I just don’t understand. I research them. First I ask my negotiator what he believes they mean. Then I look into it myself.

One agent that I hired hated this about me. We received a contract for a book deal that I really didn’t like, but he felt we should accept it because the publisher had gone to the trouble of issuing the contract. That contract had a few dealbreakers in it for me, things I had mentioned to the agent up front, things he couldn’t get the publisher to budge on. The contract came, I asked again, the publisher wouldn’t budge, and I refused to sign. The deal was off.

The agent got angry with me, and that was the end of our relationship. He did not have the ability to walk away at all stages of the deal, and that harmed my business.

But I remembered the primary rule of negotiation:

It’s my signature that goes on the contract; I’m the one who must live with the deal—not the negotiator. So therefore, if I don’t like it and I can’t fix it, I don’t agree to it.

Period.

End of story.

So I get a preliminary final contract and I got through it carefully. Often I’ll negotiate other points—through my negotiator, of course. And I outline those points as carefully as I outlined the early stage of the negotiation.

I tell the negotiator if there are any dealbreakers in the final points. I tell the negotiator if I’d sign the contract as is, but that I’d like these points if we can get them. I’m very clear about where I stand at that point in the negotiation, so that the negotiator is clear too.

Finally, because it bears repeating, I never agree to a deal that I do not understand. I can’t tell you how many times I’ve had a negotiator tell me to trust them, they did the best they could, and the deal can’t get any better. (That early agent actually said, “Trust me, honey.”) All of that might be true—the negotiator may have done the best they could. The deal might not get better. But often the things I ask for in the latter stages of the negotiation never even came up in the early stages. The negotiator might not have gotten a better deal because the negotiator didn’t know he should try.

If you keep track of the negotiator and the negotiation, you will be able to tell how good a job your negotiator is doing for you. You’ll know, for example, if the other party is getting angry at your negotiator (as in Randy’s example, above.) In that case, you might be able to step in and salvage the negotiation. I’ve done that once or twice.

You’ll also find out if your negotiator is as big an expert as she claims to be. A friend of mine hired a book agent who had worked as a book editor first. That agent claimed to know contracts.

By the time my friend got the final contract, that agent had added a mountain of clauses. (Added clauses are in bold.) All of those clauses benefited the publisher, not the writer. All of them. That agent knew contracts, all right. She knew them from the publishing side of the equation, not the writing side, but she didn’t understand the legal language at all. If she had, she would have known that she was hurting her client, not helping him.

Unfortunately for my friend, he had a trust-me agent. (I wonder if she actually patted him on the head and said, “Trust me, honey.”) And he trusted her instead of his writer friends who told him not to sign that contract, and who told him to negotiate a better one. As a result, this friend has signed the worst contract I have ever seen for a novel in my thirty years of publishing. And the sad part is that the worst clauses were added by his representative.

See why I tell you that you must know more about your business than anyone else? Why I tell you to understand what you sign? Yes, that means you must know a bit about the law as it pertains to your business, about the contracts that you will inevitably sign. As you can see from the examples from today’s newspaper, you must also understand the tax implications of your business, and how to handle your own money.

And you must supervise your employees—including the “experts” that you hire. The most important one to supervise (after your accountant and people who actually touch your money) is your negotiator, be she a lawyer, a manager, an agent, or your second in command.

You can’t become a freelancer to avoid the business world. When you’re a freelancer, you need to know more about business than everyone around you.

You must remember that your negotiator represents you. Your negotiator speaks for you. If you want her to speak in harsh tones, then hire a shark. If you want her to speak in soft tones, hire a more personable negotiator. Do not hire a pushover. Ever. Which means that you will occasionally have run-ins with your negotiator. If there is a run-in, make sure you win. If the negotiator balks, then you fire that negotiator and hire a different one.

Negotiators work for you and must have your best interest in mind.

Note I didn’t state the cliché and say that they should have your best interest at heart. They have their own best interest at heart. Ultimately, a negotiator is in business for herself. But if she wants to do a good job for you, then she must do the job you hired her for and nothing else. And she must know where she stands.

So let me reiterate.

If you decided to hire a negotiator (see last week’s post before making that decision), then here’s how you supervise that person:

1. Communicate what you want out of the negotiation in writing.

2. Make sure your negotiator understands what you want before proceeding with the negotiation.

3. The negotiator cannot make decisions on her own. She must check with you before agreeing to anything.

4. Supervise the negotiation. Be hands on.

5. Make sure you understand all the details of the negotiated deal before agreeing to anything.

6. Remember that you are bound by the deal, not your negotiator. No matter what your negotiator recommends, you do not sign (or agree to) the final deal unless you understand it and can live with its terms.

You can fire a negotiator in the middle of a negotiation. (Be aware that it might have an impact on your bargaining power, however.) You can step into that negotiation at any point and do all the work yourself. You do not need someone to negotiate for you. And if you do hire someone to negotiate for you, make sure they negotiate for you, and not for themselves or someone else.

Six posts on negotiation have given you a lot to think about and a lot to remember, I know. Negotiation is both an art and a science, and it’s critical to all forms of business. Learn your own strengths and weaknesses in negotiation. Once you know what they are, you’ll know when to hire help and when to forego it.

But even if you do hire someone to speak for you, stay informed and make sure they’re speaking your words, not theirs. Because a negotiator can screw up a deal badly without even realizing it, as in Randy Tatano’s example. A negotiator can also bind you to a deal you don’t want, as in my friend’s trust-me agent case.

In both cases, those negotiators were poorly supervised. In the case of the anchor, it’s up for debate whether or not she should have hired that particular negotiator. In the case of my writer friend, he hired a bad negotiator who made the situation much, much worse. He would have been better off signing the publisher’s boilerplate contract without any negotiation at all.

So hire someone to speak for you with trepidation, knowing that the negotiator can muck things up. Make sure you’re hiring that person for the right reasons. And keep a close eye on the proceedings.

You can now order either an e-book copy of the Guide or a trade paper copy of the Guide. It’s in slightly different format and has been organized, so that related topics are in an easily accessible place.

For those of you who’d like to buy an ebook, here’s the Amazon link as well as the Barnes & Noble link. The e-book will also be available on all the other e-book sites. If you want it in your favorite format, and the book hasn’t yet been uploaded to your favorite site, trySmashwords. You’ll be able to download in a variety of e-book formats.

[…] to post it here. Good stuff in there, though, so make sure you catch up. Then go ahead and enjoy the last installment of Kristine Kathryn Rusch’s excellent mini-series on negotiation. It’s all part of her […]

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